"Question:If a festival can’t pay a filmmaker, then why are festivals important?
Answer:Because they represent the collective judgment of the independent film community."(thanks A.J. Schnack for the link to Bob's post)
But do festivals really represent "the collective judgment of the independent film community"? I would have to say no. Because, the independent film community is, by my definition (and this is probably a definition that most people involved in indie films to some significant degree can agree with) people who purchase/watch indie movies (at theaters, on DVD, at festivals, etc.), people who make indie movies, people who distribute indie movies, people who promote indie movies, people who organize film festivals and other indie film screening events, people who criticize or otherwise write about, discuss indie movies. That is a lot of people; several hundred thousand people, at least, in the US. Now, do festivals represent the collective judgment of all these people or do festival programming represent the tastes of the programmers? I think festival programming represents the taste of the programmers; influenced by other factors such as films available for the fest, focus of the fest, etc.
There is no fixed, universal standard of "good" or "bad" in art/entertainment. There are only tastes; for example, I like the Jarmusch movie Down By Law, a friend of mine hates it, does that mean the movie is good or bad? No, it means that two people with two different tastes in movies disagree on the value of one movie.
In whatever form, whether they pay filmmakers or not, I am glad film festivals exist. Because, if nothing else, they do provide publicity to films and filmmakers.
However, if revenue is generated by showing a movie, it is fair to give some of that revenue to the makers of the movie, because without their work it would be impossible to have the festival/show a movie.
Now, it appears that there is a lot of interest in film festivals (good job film festival producers). But, even with that, if film festivals are operating in the red/not making any money/are not profitable perhaps that information can be shared with filmmakers so that we do not feel that we are being left out of a potential revenue stream. What are the numbers? What was the cost of producing your festival and how much money did the festival collect? Where is the proof (so that we can avoid the infamous Hollywood accounting system type accounting where no movie, no matter how popular, ever makes a profit)?
Showing movies is a lot of work. And there is a general understanding at the moment that theatrical screenings do not generate a significant (or any in many cases) profit for a lot of movies. So, if this condition also extends to film festivals, then show us the data & we'll (probably) quit asking for a share of the non-existent profit (although, revenue is generated by film fest screenings, even if there is no profit in the end, one could argue that paying filmmakers should be or could in the future be considered an essential operating expense similar to venue rental, ticketing expenses, etc., one that needs to be paid even if the fests do not ultimately produce a profit).
This - the nature of the relationship between indie filmmakers and indie film festivals - is no doubt an evolving thing; but, at the moment, it does seem weird & wrong that the maker/owner (at the indie film fest stage it is usually the same person or entity) of the movie does not receive any money from a ticket sold to a screening of that movie.